Medicaid Block Grant Proposal Would Impact Pregnant Women

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By Amanda Jezek, March of Dimes

House Budget Committee Chairman Paul Ryan’s recently released 2012 budget resolution was passed by the committee and is expected to be considered by the full House of Representatives this week.  It includes a proposal to convert the federal share of the Medicaid program into capped block grants to states.

Today, Medicaid finances approximately 41% of births — 1.64 million of the 4 million births annually — nationwide (up to 67% in some states) and is an essential source of coverage for preventive health services, including preconception and interconception care.  According to the US Census Bureau, 22.3 percent of women of childbearing age (13.7 million)  are uninsured, meaning that private insurance has not been an adequate coverage option for meeting women’s health needs.  A proposal to restructure and arbitrarily cap Medicaid’s ability to serve as health insurer to the 11 million women of childbearing age who rely on the program for their health needs would be a tragedy for women in every community across America. 

To be clear, the Medicaid block grant proposal does not simply reduce funding for the program.  Rather, this proposal would significantly alter the program’s structure in very important ways.  Under current law, an eligible individual who seeks to enroll in Medicaid may not be turned away.  Under a block grant scenario, when the money runs out, eligible people — including pregnant women at high risk for complications — may be denied coverage or put on a waiting list. 

The block grant proposal threatens Medicaid’s ability to adjust to downturns in the economy when individuals who meet the program’s income eligibility criteria – including pregnant women — have no other source of health insurance. Since its inception more than 45 years ago, Medicaid has been a counter-cyclical program, meaning that when the economy worsens, federal support expands, providing states the resources they need to maintain a lifeline to some of the most vulnerable individuals in America, including low income women and children.  Under a block grant or capped alternative indexed to grow at a rate slower than medical inflation, Medicaid’s capacity to help states respond to economic downturns would be limited, leaving these pregnant women with no source of health insurance.   

If Medicaid is unable to cover large numbers of income-eligible pregnant women, many will be unable to find health insurance.  A 2006 Georgetown University report commissioned by the March of Dimes, and an investigation by the House Energy and Commerce Committee in 2010 both found that most insurers in the private market do not offer maternity coverage, or if they do, it is available only as a very expensive rider. Further, because pregnancy is routinely considered a pre-existing condition, maternity coverage is only available to women who are not yet pregnant.  The lack of maternity coverage in the private individual market underscores the need to maintain Medicaid’s ability to cover pregnant women.

Being uninsured during pregnancy limits women’s access to essential prenatal, labor, delivery and postpartum services.  Typically, pregnancy is the most costly health event that a young woman and her family are likely to experience.  Maternity care in the absence of insurance coverage is expensive for a healthy pregnancy and can be financially devastating if the family is uninsured and she experiences medical problems during the pregnancy or the baby is born preterm or with a birth defect or other serious health condition. In 2007, the March of Dimes partnered with Thomson Healthcare to estimate the cost of maternity care by large employer health plans drawn from the MarketScan database for 2004.  The results show that expenditures for maternity care in 2004 averaged $8,802.  When analyzed by type of delivery, expenditures averaged $7,737 for a vaginal delivery and $10,958 for a cesarean section.  These costs pertain to healthy deliveries, and for deliveries that are complex or high risk, the costs are far greater.  Even within the Medicaid program, where lower payment rates are negotiated, the cost of maternity care would be a significant burden if the individual is uninsured.   A recent trend analysis prepared for the March of Dimes by the Urban Institute found the national average cost to Medicaid per pregnant enrollee to be $6,800 in 2003.

Medicaid also provides coverage for critical preconception and interconception care services vital to improving the health of women and their infants. Nationwide, 12 percent of women of childbearing age rely on Medicaid, and in some states, that number is as high as twenty five percent.   Medicaid is the largest source of public financing for family planning services, which help women improve their overall health, prepare for and appropriately space pregnancies.  Pregnancy spacing has been found to reduce the risk of preterm birth–an extremely costly problem that the Institute of Medicine has found resulted in $18.8 billion in medical costs alone in 2006, more than half of which were borne by Medicaid.  In sum, weakening Medicaid’s capacity to provide health insurance to women of childbearing age by restructuring the program into a capped block grant and reducing its federal funding by at least $700 billion over the next 10 years threatens maternal and child health outcomes and will likely result in higher costs for states as well as some of the nation’s most vulnerable families.

While Medicaid provides essential access to coverage for pregnant women, the program is, of course, far from perfect.  Over the years, the March of Dimes has led and supported efforts to strengthen Medicaid.  For example, the Foundation was in the forefront of promoting quality measurement and reporting for maternity care provided through Medicaid, and March of Dimes chapters throughout the country are working with state Medicaid agencies to reduce elective inductions and c-sections prior to 39 weeks gestation–a change in practice that has been shown to not only improve birth outcomes, but also save money by preventing preterm birth and reducing the need for costly NICU stays.

These are just a few examples of ways the Medicaid program can be strengthened, be made more cost efficient, and provide higher quality care.  Congress should focus on these efforts, rather than a proposal to restructure and arbitrarily cap federal support for Medicaid and, in the process, put at risk essential coverage for millions of pregnant women, infants and children.  As Congress moves forward, leaders should ensure that any new Medicaid policies come with an ironclad guarantee that no woman or child eligible for today’s programs will be denied health insurance, and most especially, that women and children who rely upon these programs do not lose benefits required for the care their doctors consider medically necessary.